Key Takeaways
Dominance of SGD-pegged stablecoins: XSGD is the only stablecoin issuer pegged to the Singapore dollar and, through partnerships with Grab and Alibaba, dominates the Southeast Asian local stablecoin market.
Market Metrics: Running on over 8 EVM chains, with 8 issuers and 5 native currencies. In Q2 2025, decentralized exchange (DEX) trading volume reached $136 million (led by Avalanche Chain and the Singapore Dollar), a 66% decrease from $404 million in Q1.
Regulatory progress: The Monetary Authority of Singapore is advancing its stablecoin framework for the Singapore dollar and SCS pegged to G10 currencies; Indonesia and Malaysia are launching regulatory sandbox trials.
Cross-border trade: Only 22% of Southeast Asia's trade will occur within the region in 2023, with over-reliance on the US dollar leading to costly delays and fees. Local stablecoins can streamline settlement processes by providing instant, low-cost transfers, further accelerated by the ASEAN Business Advisory Council's (ASEAN BAC) regional QR code payment initiative.
Financial inclusion: Over 260 million people in Southeast Asia remain underbanked or unbanked. Non-USD stablecoins, when integrated into super-app wallets like GoPay or MoMo, can expand access to affordable financial services, supporting remittances, small transactions, and everyday digital payments.
Southeast Asia (SEA) has a combined GDP of US$3.8 trillion and a population of 671 million. As the world's fifth largest economy, it competes with other economies and has 440 million internet users, driving digital transformation.
Against this backdrop of economic dynamism, non-US dollar stablecoins and digital currencies pegged to regional currencies or baskets of currencies offer transformative tools for Southeast Asia's financial ecosystem. By reducing reliance on the US dollar, these stablecoins can improve cross-border trade efficiency, stabilize intraregional transactions, and promote financial inclusion across diverse economies.
This article explores why non-USD stablecoins are crucial for Southeast Asian financial institutions and policymakers aiming to shape a resilient, integrated economic future.
trade
Since January 2020, the adoption of non-USD stablecoins in Southeast Asia has rapidly increased, growing from an initial 2 projects to 8 projects by 2025. This growth is driven by increased transaction volume and the use of diverse blockchain platforms.
In the second quarter of 2025, Southeast Asia saw 258,000 non-USD stablecoin transactions, with Singapore dollar (SGD)-pegged stablecoins (particularly XSGD) accounting for 70.1% of the market share, followed by Indonesian rupiah (IDR)-pegged stablecoins (IDRT and IDRX), which accounted for 20.3%. This reflects strong regional economic activity and regulatory support, highlighting their critical role in Southeast Asia's digital economy.
Over the past four years, and since 2020, Southeast Asia's non-USD stablecoin transaction volume has exceeded 1 million, driven by widespread adoption and strong exposure to EVM chains, which continue to lead quarterly market share growth. In the second quarter of 2025, Avalanche led with a 39.4% market share (101,000 transactions), followed by Polygon (83,000 transactions, 32.5%) and Binance Smart Chain (28,000 transactions, 10.9%). Avalanche's rapid rise is primarily attributed to the XSGD project, currently the only stablecoin running on the Avalanche chain, which has gained significant traction since its launch. XSGD is a stablecoin pegged 1:1 to the Singapore dollar and issued by StraitsX, a major payment institution licensed by the Monetary Authority of Singapore (MAS).
Event Address
Since the second quarter of 2025, non-USD stablecoins in Southeast Asia have been widely adopted, with the number of active (transaction) addresses increasing significantly to over 10,000, of which 4,558 are returning addresses and 5,743 are new addresses, indicating steady growth and increased participation of stablecoin users.
Unlike transaction counts, which reflect overall activity levels, active (transaction) addresses reflect user engagement and adoption. Among Southeast Asian non-USD stablecoins in Q2 2025, Polygon led with a 39.2% share, followed by Binance Smart Chain (BSC) with a 23.1% share and Avalanche with a 10.1% share.
Note: In the "Group by Chain" view, addresses transacting stablecoins across multiple chains (such as Polygon and Base) are counted as separate addresses on each chain, so the total number is higher than the "Ungrouped" view (which removes duplicate data).
DEX trading volume
Source: https://dune.com/queries/5748360/9327460
In the second quarter of 2025, DEX trading volume fell 66% to $136 million from $404 million in the first quarter. Avalanche led with a 51% share ($69 million), followed by Polygon with 33% ($45 million), and Ethereum with 9% ($12 million). This decline highlights the blockchain's shift towards scalability, with Avalanche and Polygon dominating.
As previously mentioned, DEX trading volume in local currency terms reached $132 million in the second quarter of 2025, with Singapore dollar-pegged stablecoins dominating the Southeast Asian non-USD stablecoin market. Singapore dollar-denominated assets accounted for 93.1% ($127 million), followed by the Philippine peso (PHP) at 3.9% ($5 million), and the Indonesian rupiah (IDR) at 2.7% ($3.6 million). This highlights the Singapore dollar's dominance in regional DEX activity.
Stablecoins in Southeast Asia: Opportunities and Challenges
opportunity
Improve cross-border trade efficiency
Intra-regional trade in Southeast Asia accounted for 22% of its total trade in 2023, but transactions are typically conducted through US dollar-denominated correspondent banks, resulting in high fees and delays of up to two days. Stablecoins pegged to Southeast Asian currencies offer a more efficient alternative, enabling near-instant settlement at a lower cost. Building on this, the ASEAN Business Advisory Council (BAC) has adopted cross-border QR code payments settled in local currencies. BAC's collaboration with Southeast Asian stablecoin issuers is expected to further reduce remittance fees and improve exchange rates.
Promoting financial inclusion
With 260 million people in Southeast Asia lacking or unbanked services, non-USD stablecoins can fill this financial services gap. Mobile-based stablecoin wallets integrated with platforms like Indonesia's GoPay or Vietnam's MoMo can enable low-cost remittances and small transactions.
challenge
Regulatory uncertainty and fragmentation
Southeast Asia's diverse regulatory frameworks create uncertainty for stablecoin issuers and users. Policies vary significantly across countries, with Singapore's more aggressive policies and other countries adopting stricter regulations. This can lead to compliance challenges and uneven adoption.
Recommendation: Southeast Asian policymakers should collaborate to develop a unified regulatory framework for stablecoins, with clear guidelines on licensing, consumer protection, and anti-money laundering (AML) compliance to build trust and consistency.
Market volatility and currency peg risk
Stablecoins pegged to regional currencies are vulnerable to fluctuations in their respective currencies, which could undermine their stability and user confidence. Insufficient reserve backing or poor management could further exacerbate risks.
Recommendation: Stablecoin issuers should maintain transparent, fully backed reserves and undergo regular independent third-party audits. A diversified basket of pegged currencies can also reduce volatility risk.
in conclusion
In the second quarter of 2025, Southeast Asia's non-USD stablecoin market saw significant growth, led by XSGD, the only issuer pegged to the Singapore dollar, driven by partnerships with Grab and Alibaba. Operating on over eight EVM chains, with eight issuers and support in five local currencies, decentralized exchange (DEX) trading volume reached $136 million, primarily concentrated in Avalanche and the Singapore dollar, a 66% decrease from $404 million in the first quarter. The Monetary Authority of Singapore (MAS) advanced stablecoin frameworks for the Singapore dollar and G10 currencies, while Indonesia and Malaysia introduced regulatory sandboxes.
This growth highlights the potential of non-USD stablecoins to enhance cross-border trade and financial inclusion in Southeast Asia, but factors such as regulatory fragmentation, currency volatility, cybersecurity risks, and uneven digital infrastructure require careful management for sustainable development.
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